Quote on Today's RBI Credit Policy Update from Mr. V S Parthasarathy, CFO, Group CIO, EVP - Mahindra & Mahindra Ltd

Quote on today's RBI credit policy update from Mr. V S Parthasarathy, CFO, Group CIO, EVP - Mahindra & Mahindra Ltd:

Today’s  policy can best be described as  ‘RBI remains Consistent and Industry remains Concerned’.

As an Industry player, given the current stress and need for stimulus, a rate cut would have been welcomed by us. A monetary push would have helped growth.

After having focused on the health Drivers (like fiscal consolidation, current account position , Inflation trajectory) it could be argued that the RBI should now focus on growth drivers. The RBI Governor began the action on Jan 15, and a continuation of this action would have been a tail wind for growth & demand.

The RBI had its finger on the button, but chose pause, we had expected them to go for another cut. However having said so, we do appreciate that the RBI has shown consistency in the stand they had taken to avoid flip-flop.

We welcome other regulatory and financial changes and we are sure it would reduce the interest rate and currency volatility.

Introduction of new IRF (Interest Rate Futures) tenure would increase the depth of markets and flexibility to market participants.

The intention to formalize the optionalities in FDI is a welcome step. The operational freedom on limits for corporates to hedge through  ETCD (Exchange Traded Currency Derivatives) upto 100 % of actual of previous year or 3 years’ average will deepen the participation level.